Obama acknowledged the nation lost ground last month in the effort to reduce unemployment and then offered an assertive defense of his administration’s actions to climb out of “the worst recession since the Great Depression.”

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A report released Friday by the Labor Department showed the economy lost 85,000 jobs in December, leaving the unemployment rate for a second month at 10 percent.

The glimmer of good news in the report was that the economy gained 4,000 jobs in November, despite an initial estimate that 11,000 jobs had been lost.

Obama seized on November’s growth as the “first month of job gains in nearly two years” but was also careful to temper any enthusiasm.

“We know that no single month makes a trend,” he said, going on to emphasize that job losses in the final quarter of 2009 were a tenth of the first quarter.

The president highlighted three policy thrusts he believes will rebuild the prosperity of the middle class and provide more people with what he views as the building blocks of the American dream: “A good job with a good wage; a secure and dignified retirement; stable healthcare so you don’t go broke just because you get sick.”

Obama vowed investments in science and clean-energy technology, education reform and healthcare reform would build a new foundation for the economy.

Republican-allied critics, however, have challenged employment claims based on clean-energy investment.

Thomas Pyle, president of the Institute for Energy Research, accused Obama of throwing “money at an unproven technology that is not economically viable in the marketplace.” Pyle says that relatively few jobs have been created from such investment compared to jobs that could be created by loosening restrictions on oil, gas and coal extraction.

Obama devoted the second half of his address to what Democrats expect to be the crowning policy achievement of the 111th Congress.

“Once I sign health insurance reform into law, doctors and patients will have more control over their healthcare decisions, and insurance company bureaucrats will have less,” Obama said of the health reform bill.

“All told, these changes represent the most sweeping reforms and toughest restrictions on insurance companies that this country has ever known,” he said

Democratic leaders in Congress hope to pass the final version of the bill in time for the State of the Union address, but Obama is not waiting for it to reach his desk to begin trumpeting the historic achievement.

Some Republican leadership aides claim that passage of the legislation is not assured and Democratic leaders must still solve an intra-party dispute over abortion language and other differences between the bills passed by each chamber.

Obama also used his address to respond to the persistent critique from Republicans that while many tax increases go into effect immediately, health reform benefits are delayed by several years to hide their true cost.

Obama said uninsured citizens with pre-existing illnesses would immediately be able to purchase coverage they can afford because of a ban on discrimination by insurance companies.

He also noted that upon passage the law would allow young adults to stay on their parents’ insurance policy until 26 or 27 years old; small-business owners would receive tax credits to purchase coverage for employees; and seniors whose prescription drug expenses are not covered by Medicare would begin to receive discounts.

Undermining one of the president’s claims, some liberal experts and policy experts have raised doubts over whether the reform bill would completely bar the insurance industry from discriminating against pre-existing conditions.

Health Care for America Now, a coalition of labor and liberal advocacy groups, sponsored a conference call this past week warning the Senate bill contains a loophole that “would allow insurers to discriminate on the basis of pre-existing health conditions — contrary to one of the major stated goals of health reform,” according to a statement.

Despite skepticism, Obama ended his address on a positive note.

“I am as hopeful and as confident as ever that we’re going to rise to this moment the same way that generations of Americans always have: as one nation, and one people,” he said.